XN000022-1988-09-13 — Page 2

TUESDAY, SEPTEMBER 13, 1988

1

GLOBAL FACTORS HAVE CONSIDERABLE BEARING ON ECONOMY: FS

THE FINANCIAL SECRETARY, MR FIERS JACOBS, STRESSED THE GROWING INTERDEPENDENCE OF THE WORLD ECONOMY AND THE IMPLICATIONS OF THIS FOR HONG KONG IN HIS ADDRESS THIS (TUESDAY) EVENING TO THE HONG KONG SOCIETY OF SECURITY ANALYSTS.

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"OVER THE LAST FEW YEARS, THE WORLD'S ECONOMIES HAVE BEEN MARKED INCREASINGLY BY IMBALANCES AND UNCERTAINTIES. GIVEN THE DEGREE OF INTERDEPENDENCE THAT EXISTS, FEW ECONOMIES ARE UNAFFECTED BY THESE IMBALANCES AND UNCERTAINTIES, MR JACOBS SAID, ADDING THAT THIS WAS ESPECIALLY TRUE FOR A SMALL OPEN ECONOMY SUCH AS THAT OF HONG KONG.

THE PLAIN FACT WAS THAT WHETHER WE WERE LOOKING AT TRADE,

ASPECT CURRENCIES, SECURITIES MARKETS, INFLATIONARY PRESSURES, OR ANY OF THE ECONOMY, IT WAS READILY APPARENT THAT WHAT HAPPENED ELSEWHERE

ON HAD A CONSIDERABLE BEARING

OUR OWN POSITION, HE SAID IN HIS MID-YEAR REVIEW OF HONG KONG'S ECONOMIC SITUATION.

HAD BECOME EVEN WITH SENSITIVITY BUT ALSO TO THE THE INTERNATIONAL

THE FINANCIAL SECRETARY EMPHASISED THAT WHILE THE GOVERNMENT

IT SHOULD ADHERE TO FREF AND OPEN MARKET POLICIES, MORE NECESSARY THAN BEFORE TO FORMULATE POLICIES

KONG COMMUNITY NOT ONLY TO THE NEEDS OF THE HONG EXTENT THAT THOSE POLICIES COULD BE DEFENDED IN ARENA.

OMNIBUS TRADE AND

ALTHOUGH THE U.S. PROVED TO BE LESS RESTRICTIVE THAN LEGISLATION WAR NEVER WELCOME TO

ON TRADE, MR JACOBS SAID COMPETITIVENESS ACT OF 1988 BAD ONCE SEEMED LIKELY, THIS TYPE OF THOSE WHO BELIEVED IN FREE AND OPEN MARKET PLACES.

"IN THIS CONTEXT, IT IS CLEAR, I TELENK, THAT THE UNITED STATES ITS ADMINISTRATION IS WELL AWARE THAT THE STRUCTURAL IMBALANCE WITHIN OWN ECONOMY HAS BEEN A MAJOR FACTOR LEADING TO ITS CURRENT TRADE IMBALANCE.

TRADE

OFTEN BEEN

THE

ON

THE

BILATERAL

"BUT, ON THE OTHER HAND, PUBLIC CONCERN IN THE STATES OVER

HAS IMBALANCE

MISLEADINGLY FOCUSSED CONTRIBUTIONS MADE TO THAT IMBALANCE BY THE UNITED STATES' TRADE DEFICITS," BE SAID.

ATTENTION JAPAN, IN ASIA.

OF MR JACOBS CITED AS AN EXAMPLE THE UNDUE AMOUNT

DEFICITS WITH BEING PAID TO THE UNITED STATES' VISIBLE TRADE AND WITH THE SO-CALLED NEWLY INDUSTRIALISED ECONOMIES (NIE'S}

WITH

BEEN

"THE LUMPING TOGETHER OF HONG KONG

TAIWAN, SOUTH KOREA AND SINGAPORE UNDER SUCH TITLES AS THE FOUR LITTLE DRAGONS' HAS PARTICULARLY UNFORTUNATE AND MISLEADING.

"AS WE